Broadwing Corporation Reports Financial Results for the Third Quarter.COLUMBIA Columbia, cities, United States Columbia (kəlŭm`bēə). 1 City (1990 pop. 75,883), Howard co., central Md., between Washington, D.C., and Baltimore. , Md. -- Broadwing Corporation Broadwing Corporation is a data, voice, and media solutions company based in Austin, Texas, USA. Enabled by its 20,000-mile All-Optical-Network and 20 nation-wide HDTV transmitting and delivering centers, Broadwing Communications provides communications solutions and (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BWNG): --Former Corvis Corp. Recognized $163.4 Million in Revenue --Corporate Gross Margins Up Again Significantly Year-Over-Year --Broadband/Data Revenues Up Significantly Year-Over-Year --Company Marks Strategic Milestone With Name Change and Close of Focal Acquisition Broadwing Corporation (NASDAQ:BWNG) today reported revenues of $163.4 million for its third fiscal quarter ended September September: see month. 30, 2004. Revenues for the third quarter were generated primarily from communications services revenues recorded by its subsidiary, Broadwing Broadwing can mean:-
LLC - Logical Link Control . "This quarter marked another milestone in our strategy to focus on opportunities in the communication services market," said Dr. David Huber Huber may refer to:
The company reported that its broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). and data business has grown 11 percent year-over-year, including recent growth in its high-bandwidth, optical services. Communications services' gross margins grew to 32 percent in the third quarter versus 23 percent for the same period last year. During the quarter "Corvis" became "Broadwing," underscoring the company's primary focus as a service provider of voice, data and media with an expanded reach into major metropolitan areas. The company also closed the acquisition of Focal Communications that added 4,000 enterprise and wholesale customers in 23 tier-one U.S. markets. "With the enhanced power of the Broadwing brand and our expanded network assets, we are well-positioned to become the carrier of choice for customers who demand speed, flexibility, reliability and market-leading customer service," said Dr. Huber. Quarterly Results The Broadwing Communications, LLC, services subsidiary contributed $163.1 million in revenues in the third quarter, essentially in line with the company's expectations. This quarter's revenues included one month of revenues from Focal Communications. Broadwing's data and broadband revenues, targeted areas of growth, increased again this quarter, up 5% sequentially from the second quarter 2004 and represented 61% of the company's quarterly services revenue or $100.2 million dollars. Broadwing's long-distance long-dis·tance adj. 1. Covering a long distance: a long-distance runner; operating under long-distance supervision. 2. and local voice services revenues were up 36% from the second quarter 2004 and represented 39% of total services revenues for the third quarter 2004 or $62.9 million dollars. The increase in voice revenues this quarter was due primarily to the inclusion of Focal voice revenues. The remaining $0.4 million of total reported revenue was generated from the company's communications equipment and equipment services delivered primarily to the U.S. Government. Reported net loss for the quarter was ($36.8) million, or ($0.69) loss per share, for the current quarter as compared with a reported net loss of ($112.3) million, or ($2.55) loss per share, for the third quarter of 2003. This quarter's results included restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other charges of $2.6 million dollars. The company's reported net loss per share results are reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of the company's recent 1:20 reverse stock split and subsequent 1:1 stock dividend enacted in the third quarter. "In a little over a year, we have accomplished a great deal of what we set out to do," said Lynn Anderson Lynn Anderson (b. Lynn Rene Anderson September 26, 1947) is an American country music singer. She was a consistent hit maker and one of country music's leading ladies throughout the 1970s. , Broadwing Corporation's chief financial officer. "We've we've Contraction of we have. we've have made marked improvements in our reported financials as we continue to position the company for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. success and profitability." Financial Position Cash, cash equivalents and investments were $321.7 million at September 30, 2004. This compares to $451.9 million at June June: see month. 30, 2004. The change in cash this quarter was due primarily to cash expenditures associated with the pay-off of approximately $78.6 million of debt assumed in the acquisition of Focal Communications, $11.4 million in capital expenditures related to our new market initiatives like VoIP and the Media Services Network, network upgrades and success-based investments for recent customer wins. In addition, the company had cash expenditures associated with annual insurance premiums paid this quarter as well as costs associated with the closing of the Focal acquisition. Quarterly and Year-To-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Highlights October October: see month. 20, 2004 - Broadwing Communications Launches Broadwing PRIorityConnect New Voice Product Enables Carriers and Enterprises to Offer National Connectivity for Their Voice over Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (VoIP) Deployment http://www.broadwing.com/bwngcorp/pressreleases/pr468.html October 20, 2004 - Broadwing Communications Opens Television Operations Center The facility or location on an installation, base, or facility used by the commander to command, control, and coordinate all crisis activities. See also base defense operations center; command center. Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). Facility Enables Enhanced 24/7 Management and Control of Media Services Network for an Expanding Portfolio of Services http://www.broadwing.com/bwngcorp/pressreleases/pr467.html September 28, 2004 - Corvis Corporation to Change Name to Broadwing Corporation Reflects Primary Focus as All-Optical Service Provider of Voice, Data and Media; Change Follows Two Successful Acquisitions in Past 18 Months; Corvis Equipment Business to Become Subsidiary of Broadwing Corporation; Announces Reverse Stock Split and Stock Dividend http://www.broadwing.com/bwngcorp/pressreleases/pr465.html September 2, 2004 - Broadwing Communications to Expand Its Reach with the Addition of Focal Communications Corvis Corporation, Parent Company, Closes Acquisition of Chicago-Based CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) ; Adds 4,000 Enterprise and Wholesale Customers in 23 Tier-One U.S. Markets; Combined Network To Expand Reach into Major Metropolitan Areas; Local Exchange Voice Added to Robust Portfolio of Voice, Data and Video Services http://www.broadwing.com/bwngcorp/pressreleases/corv2.html August 6, 2004 - Broadwing Communications Selected as a Certified See certification. Vendor for General Motors Dealer Equipment General Motors Dealers Able to Use Broadwing's Award-Winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" IP Backbone and All-Optical Network A communications network that works completely in the optical domain. It uses optical switches connected by optical fibers. See optical switch and optical computer. for Critical Data Services http://www.broadwing.com/bwngcorp/pressreleases/pr460.html July July: see month. 26, 2004 - Ascent Media Ascent Media Group LLC provides creative and technical media services, including post-production work, for the media and entertainment industries. Customers include studios, producers and networks. Ascent Media is based in Santa Monica, California. Network Services Selects Broadwing Communications for Real-Time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. Video and File Transfers Ascent Media Takes its Place as Broadwing's First Customer Using DTM DTM dermatophyte test medium. Technology http://www.broadwing.com/bwngcorp/pressreleases/pr458.html July 23, 2004 - Broadwing Communications Wins 2004 Product Line Strategy Leadership Award from Frost & Sullivan Awarded for "Customer Insight" Leading to Expanded "Connect Family of Services" for Enterprises and Service Providers http://www.broadwing.com/bwngcorp/pressreleases/pr457.html July 22, 2004 - National Healthcare Provider Selects Broadwing Communications Mayo Foundation signs an agreement with Broadwing for private line services utilizing Broadwing's nationwide, all-optical network to connect clinic locations in Rochester Rochester (rŏch`ĕstər, –ĭstər). 1 City (1990 pop. 70,745), seat of Olmsted co., SE Minn.; inc. 1858. , Minnesota Minnesota, state, United States Minnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces ; Jacksonville, Florida “Jacksonville” redirects here. For other uses, see Jacksonville (disambiguation). Jacksonville is the largest city in the state of Florida and the county seat of Duval County. ; and Scottsdale, Arizona Scottsdale (O'odham Vaṣai S-vaṣonĭ) is a city in Maricopa County, Arizona, United States, adjacent to Phoenix. Scottsdale has become internationally recognized as a premier and posh tourist destination, while maintaining its own identity and culture as " . http://www.broadwing.com/bwngcorp/pressreleases/pr456.html June 16, 2004 - AirTran Airways AirTran Airways is a low-cost airline that is a Delaware corporation with headquarters in Orlando, Florida, USA and is a subsidiary of AirTran Holdings. AirTran operates over 750 daily flights throughout the eastern USA and the Midwest, including over 270 daily departures from Soars with Broadwing Communications Award-Winning Backbone Enables On-Line Reservations and Check-In for Airline http://www.broadwing.com/bwngcorp/pressreleases/pr454.html June 8, 2004 - Cozen coz·en v. coz·ened, coz·en·ing, coz·ens v.tr. 1. To mislead by means of a petty trick or fraud; deceive. 2. To persuade or induce to do something by cajoling or wheedling. 3. O'Connor O'Con·nor , Flannery 1925-1964. American writer whose novels Wise Blood (1952) and The Violent Bear It Away (1960) and short stories, collected in such works as A Good Man Is Hard to Find Joins Leading Law Firms This list of the world's largest law firms by revenue is taken from The Lawyer and The American Lawyer and is ordered by 2006 revenue:[1]
Cozen O'Connor Connects Domestic Locations with Broadwing All-Optical Network http://www.broadwing.com/bwngcorp/pressreleases/pr451.html April 14, 2004 - Broadwing Launches Media Services Network All-Optical Network Enables "Contribution-Quality" Video for Broadcast Television and Media Producer Markets. Announces Construction of New Television Operations Center in Maryland and First Customer-HTN Communications. http://www.broadwing.com/bwngcorp/pressreleases/pr446.html March 22, 2004 - Broadwing Selected as Primary Provider for GENEX Services, Inc. Leading Managed Care Services Provider Renews Contract, Adds Data And Voice Products in Multi-Year, Multi-Million Dollar Deal. http://www.corvisequipment.com/displayRelease/0,1416,367,00.html March 18, 2004 - Blue Cross and Blue Shield Association
New Voice and Data Products including Business Continuity, Disaster Recovery and MultiConnect Express Offered to 41 Member Plans. http://www.corvisequipment.com/displayRelease/0,1416,366,00.html March 8, 2004 - Corvis Corporation to Acquire Focal Communications Expands Market Opportunities and Revenue Stream for Broadwing Communications While Accelerating Broadwing's Access Forward Cost Initiative, Nationwide CLEC Offers Complementary Footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. in Major Metro Areas This article is about the music production team. For the article about population centers, see metropolitan area. Metro Area are a Brooklyn-based dance music production team composed of Morgan Geist and Darshan Jesrani. , Broadwing's All-Optical Network to Lower Focal's Long Haul Long distance. Long haul implies traversing a state or a country. Contrast with short haul. Transport Costs, Deal Expected to Close Later This Summer. http://www.corvisequipment.com/displayRelease/0,1416,365,00.html March 2, 2004 - Western Gas Resources Western Gas Resources is a Fortune 1000 company based in Denver, Colorado and founded in 1971. Western is an independent natural gas explorer, producer, gatherer, processor, transporter and energy marketer. Selects Broadwing for Frame Relay A high-speed packet switching protocol used in wide area networks (WANs). Providing a granular service of up to DS3 speed (45 Mbps), it has become popular for LAN to LAN connections across remote distances, and services are offered by most major carriers. Services Fortune 1000 Company Uses Broadwing Network to Connect Field Service Sites in Remote Areas of Rocky Mountains Rocky Mountains, major mountain system of W North America and easternmost belt of the North American cordillera, extending more than 3,000 mi (4,800 km) from central N.Mex. to NW Alaska; Mt. Elbert (14,431 ft/4,399 m) in Colorado is the highest peak. , Mid-Continent and West Texas Regions of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . http://www.corvisequipment.com/displayRelease/0,1416,364,00.html February 24, 2004 - Broadwing and Shaw Communications Shaw Communications Inc. (TSX: SJR.NV.B NYSE: SJR) is a Canadian telecomunications company headquartered in Calgary, Alberta. The company was founded by J.R. Shaw in 1966 as Capital Cable Television Co Ltd.. Expand Services and Market Footprint Across North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. Strategic Agreement Provides for Broadwing to Supply Network Services to Big Pipe in the United States and for Big Pipe to Supply Broadwing with Network Services Throughout Canada. http://www.corvisequipment.com/displayRelease/0,1416,363,00.html February 23, 2004 - Corvis Closes its Private Placement of up to $300 Million of Senior Unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. Convertible Notes Strengthens Already Strong Balance Sheet That Demonstrates Staying Power for Largest Customers, Funds Help Support Rollout Plans for New Service and Product Initiatives, Possible Strategic Acquisitions. http://www.corvisequipment.com/displayRelease/0,1416,362,00.html February 18, 2004 - Illinois Tool Works Illinois Tool Works or ITW (NYSE: ITW) is a Fortune 500 company that produces engineered fasteners and components, equipment and consumable systems, and specialty products. It was founded in 1912 by Byron L. Smith, and three other men Frank W. England, Paul B. Renews Contract with Broadwing Fortune 500 Company Selects Broadwing as One of its Preferred Carriers for Private Line Frame Relay, Dedicated Internet Access See how to access the Internet. and Voice. http://www.corvisequipment.com/displayRelease/0,1416,361,00.html Webcast Information In conjunction with this announcement, Broadwing will host a conference call to review its third quarter financial results and other operational developments today, November 9, at 11:00 AM ET. The live broadcast of the conference will be available via Broadwing's website, www.broadwing.com. An archived audio of the conference call will be available for future reference through the Broadwing website at www.broadwing.com. About Broadwing Corporation Broadwing Corporation, through its consolidated subsidiaries Broadwing Communications, LLC, and Corvis Equipment Corporation, offers innovative optical networking Communications between computers, telephones and other electronic devices using light. An optical network is far more reliable and has far greater potential transmission capacity than networking in the electrical domain. See optical fiber. solutions that deliver voice, video and data solutions rapidly, flexibly and at what we believe to be the lowest total cost in the industry. Broadwing Communications, LLC, is an innovative provider of data, voice, and video solutions to enterprise, service provider, and government customers. Enabled by its one-of-a-kind, all-optical network and award-winning IP backbone, Broadwing Communications, LLC, offers a full suite of the highest quality communications products and services, with unparalleled customer focus and speed. Corvis Equipment Corporation provides service providers and government agencies with scalable optical networking equipment that dramatically reduces the overall expenses associated with building and operating networks. For more information, visit www.broadwing.com. Broadwing and its logo and Corvis and its logo are trademarks and/or service marks of Broadwing Communications, LLC, and/or Broadwing Corporation. All trademarks and service marks not belonging to Broadwing are the property of their respective owners. Investor Note Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements in this press release regarding Broadwing Corporation and/or Broadwing Communications, LLC (collectively "Broadwing") that are not statements of historical fact may include forward-looking statements, and statements regarding Broadwing's beliefs, plans, expectations or intentions regarding the future are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. and Section 21E of the Securities Exchange Act of 1934, as amended. All such forward-looking statements are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Broadwing's actual results could differ materially from these statements.
BROADWING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Unaudited
Quarter Ended
---------------------------
September 30, September 30,
2004 2003
------------- -------------
Revenue:
Communications services $163,065 $143,124
Communications equipment 381 114
------------- -------------
Total revenue 163,446 143,238
Operating expenses:
Cost of revenue:
Communications services 111,301 109,618
Communications equipment 192 29,668
------------- -------------
Total cost of revenue 111,493 139,286
Research and development 3,115 7,692
Selling, general and administrative 64,330 60,520
Depreciation 10,009 11,460
Amortization 1,158 2,112
Equity-based expense 616 5,182
Restructuring and other charges 2,638 30,457
------------- -------------
Total operating expenses 193,359 256,709
Operating loss (29,913) (113,471)
Interest expense, net of capitalized
amounts (8,645) (58)
Other income and expense, net 1,756 990
------------- -------------
Net loss before minority interest (36,802) (112,539)
Minority interest -- 276
Net loss $(36,802) $(112,263)
============= =============
Net loss per share $(0.69) $(2.55)
============= =============
Weighted average shares outstanding 53,302 43,985
============= =============
BROADWING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Unaudited
Quarter Ended
---------------------------
September 30, June 30,
2004 2004
------------- -------------
Revenue:
Communications services $163,065 $141,405
Communications equipment 381 725
------------- -------------
Total revenue 163,446 142,130
Operating expenses:
Cost of revenue:
Communications services 111,301 97,147
Communications equipment 192 242
------------- -------------
Total cost of revenue 111,493 97,389
Research and development 3,115 3,852
Selling, general and administrative 64,330 61,241
Depreciation 10,009 5,974
Amortization 1,158 1,040
Equity-based expense 616 2,667
Restructuring and other charges 2,638 194
------------- -------------
Total operating expenses 193,359 172,357
Operating loss (29,913) (30,227)
Interest expense, net of capitalized
amounts (8,645) (10,670)
Other income and expense, net 1,756 2,818
------------- -------------
Net loss $(36,802) $(38,079)
============= =============
Net loss per share $(0.69) $(0.78)
============= =============
Weighted average shares outstanding 53,302 48,632
============= =============
BROADWING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(In thousands)
Unaudited
For Discussion Purposes Only
Quarter Ended
September 30, 2004
---------------------------------------
Communications Communications
Equipment Services Total
-------------- -------------- ---------
Revenue:
Communications services $-- $163,065 $163,065
Communications equipment 381 -- 381
-------------- -------------- ---------
Total revenue 381 163,065 163,446
Operating expenses:
Cost of revenue:
Communications services -- 111,301 111,301
Communications equipment 192 -- 192
-------------- -------------- ---------
Total cost of revenue 192 111,301 111,493
Research and development 3,115 -- 3,115
Selling, general and
administrative 6,960 57,370 64,330
Depreciation 864 9,145 10,009
Amortization -- 1,158 1,158
Equity-based expense 616 -- 616
Restructuring and other
charges 1,806 832 2,638
-------------- -------------- ---------
Total operating expenses 13,553 179,806 193,359
Operating loss (13,172) (16,741) (29,913)
Interest expense, net of
capitalized amounts (8,357) (288) (8,645)
Other income and expense, net 1,611 145 1,756
-------------- -------------- ---------
Net loss $(19,918) $(16,884) $(36,802)
============== ============== =========
BROADWING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
September 30, June 30,
2004 2004
(Unaudited) (Unaudited)
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $207,845 $393,032
Short-term investments 61,776 33,755
Trade accounts receivable, net 88,575 50,923
Inventory, net 1,706 701
Other current assets 35,448 25,814
------------- -------------
Total current assets 395,350 504,225
Restricted cash, non-current 14,013 8,998
Property and equipment, net 286,072 137,049
Intangible assets, net 31,545 22,803
Goodwill 30,601 --
Long-term investments 52,054 25,085
Other non-current assets, net 9,703 8,793
------------- -------------
Total assets $819,338 $706,953
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable, net of discounts, and
capital lease obligations, current
portion $113,743 $109,806
Accounts payable 19,050 31,021
Accrued expenses and other liabilities 99,864 61,522
Deferred revenue, current portion 12,920 12,558
Accrued restructuring and other charges 5,158 4,288
------------- -------------
Total current liabilities 250,735 219,195
Notes payable, net of discounts, and
capital lease obligations, net of
current portion 82,842 93,414
Deferred revenue, net of current portion 15,123 16,875
Other long-term liabilities 7,398 5,685
------------- -------------
Total liabilities 356,098 335,169
Stockholders' equity:
Common stock(a) 6,188 4,996
Additional paid-in capital 3,096,820 2,969,727
Treasury stock, 1,228,180 shares at an
average cost of $7.70 per share (9,512) (9,512)
Accumulated other comprehensive loss:
Unrealized investment losses (302) (275)
Accumulated deficit (2,629,954) (2,593,152)
------------- -------------
Total stockholders' equity 463,240 371,784
------------- -------------
Total liabilities and stockholders'
equity $819,338 $706,953
============= =============
(a) $0.01 per share par value; 190,000,000 authorized shares;
61,929,542 shares issued and 60,701,362 shares outstanding as of
9/30/04; 50,016,890 shares issued and 48,788,710 shares
outstanding as of 6/30/04.
OTHER FINANCIAL INFORMATION
(In thousands)
Three Months Ended
September 30, September 30,
2004 2003
------------- -------------
Capital expenditures $11,440 $4,000
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